We recently compiled a list of the Jim Cramer's Lightning Round: 7 Stocks to Watch.In this article, we are going to take a look at where Dow Inc. (NYSE:DOW) stands against the other stocks featured in Jim Cramer's Lightning Round.
Jim Cramer, the host of Mad Money, recently offered his views on several key topics, including Big Tech stocks and cryptocurrency. On the subject of Big Tech, Cramer advised investors not to write off the mega-cap companies, especially after some of them saw gains toward the end of November, following declines. He stressed that moments like these serve as a reminder of what happens when people lose faith in these companies. Cramer explained:
“Remember it because it’s a textbook reminder of what happens when you decide the mega capitalization stocks are done, when you think that they’re written off. The moment you give up on them, what happens? They come roaring back.”
Cramer also reiterated his long-standing support for cryptocurrency, framing it as a potential hedge against the government's growing deficit and the risk of inflation. While acknowledging that there is no clear evidence yet that crypto can effectively shield against economic challenges, he suggested that it remains a plausible option for many investors.
“I’ve liked crypto for a very long time, mostly because I know there’s a huge constituency of investors who want to buy something that can protect them from our government’s busted budget.”
He added that, although crypto's ability to offer protection is unproven, "sometimes that’s all you need in this business." Reflecting on the country's fiscal outlook, Cramer expressed hope that the U.S. economy might eventually grow its way out of the deficit through higher tax receipts. However, he fears that political gridlock, particularly during debt ceiling debates, could lead to drastic measures, such as the government buying back treasury bonds at a discount.
Cramer also expressed disappointment in both the Obama and Trump administrations for failing to issue long-term, 50-year treasury bonds during periods of ultra-low interest rates. He described this decision as a missed opportunity that would have saved the government substantial amounts of money. Instead, Cramer noted that the government now finds itself issuing short-term debt at much higher rates, which he deemed a mistake.
“These days, I still have some gold as a hedge, but because it can be easily confiscated... I think Bitcoin, Ethereum, maybe even some other cryptocurrencies deserve a spot in your portfolio too. Maybe one day, if the deficit gets under control, I'll change my tune. But anyone who's followed me for more than 10 minutes knows that I'm a huge skeptic about our government's ability to balance the budget.”
"It’s not that we don’t know how to solve the problem, it’s that legislators lack the political will to do things that are unpopular," he explained. He pointed out that balancing the budget requires difficult choices, such as raising taxes or cutting spending, but most politicians prefer to delay action, leaving tough decisions to future administrations. Given this outlook, Cramer continues to hold cryptocurrency as a safeguard against national debt concerns, acknowledging that while he hopes the deficit issue will be resolved, he remains doubtful it will happen during his lifetime.
Our Methodology
For this article, we compiled a list of 7 stocks that were discussed by Jim Cramer during a recent episode of Mad Money. We listed the stocks in ascending order of their hedge fund sentiment as of the third quarter, which was taken from Insider Monkey’s database of 900 hedge funds.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 275% since May 2014, beating its benchmark by 150 percentage points (see more details here).
A technician operating state of the art machines manufacturing specialized packaging materials.
A caller asked Cramer’s thoughts on Dow Inc. (NYSE:DOW), highlighting that the stock was recently dropped by the Dow Jones Industrial Average. Here’s what Mad Money’s host had to say:
“This is a tough one. I think that Jim Fitterling does a great job, but it needed China. It needs pricing to go up, it needs a much stronger economy. It yields 6.29. A lot of people bought it in the ‘50s thinking that it wouldn't break down through the 5% level. If you don't have growth and you sell at 21 times earnings, you're not gonna be able to do anything. At these prices, I'm willing to put a position on but understand that the yield turned out to be not the kind of protection that we thought.”
Dow (NYSE:DOW) provides a wide range of materials science solutions for various industries, through its subsidiaries, offering products such as ethylene, propylene, coatings, and adhesives. It was removed from the Dow Jones Industrial Average (DJIA) before the opening of trading on November 8.
According to S&P Dow Jones Indices, the decision was influenced by the fact that Dow Inc. had become the smallest company in the index by market capitalization. During its third-quarter earnings call, management acknowledged that it had been facing subdued demand in several of its end markets and regions. The company noted that the greatest challenges were being experienced in Europe and China.
Management commented that consumer spending remained under pressure due to ongoing inflation, and infrastructure demand, especially in residential construction, was notably low. Management also noted that in China, new home prices had dropped for the 15th consecutive month. Dow (NYSE:DOW) also observed that auto production in China had fallen for the fourth month in a row, a reflection of both weak domestic demand and the impact of European tariffs on exports.
It should be noted that CEO Jim Fitterling, talking about the future, stated that the company's financial stability will sustain its growth investments, which are aimed at higher-value sectors and regions, especially those with strong demand and where the company holds a cost advantage. These investments are projected to generate over $3 billion in underlying earnings by 2030.
Overall DOW ranks 5th on our list of the stocks featured in Jim Cramer's Lightning Round. While we acknowledge the potential of DOW as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than DOW but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
